Canada's housing market shifts into sellers' conditions
Canada’s residential real estate market is showing signs of a regain in momentum, following an ongoing slump that has lasted for more than a year.
Newly released statistics show national home sales went up by 11.3% in April 2023 compared to the previous month.
However, activity for April 2023 was still 19.5% below the same month last year.
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According to the Canadian Real Estate Association (CREA), the month’s gains were “foreshadowed” by smaller back-to-back gains in February and March 2023, and while the sales increase was seen across the country, the trend was dominated by Metro Vancouver and Greater Toronto.
“Over the last few months, there have been signs that housing markets were going to heat back up this year, so it wasn’t a surprise to see things take off after the Easter weekend, which often serves as the opener to the spring market,” said Larry Cerqua, chair of the CREA.
“The issue going forward is not new: demand is once again returning at a scale that is outpacing supply.”
The number of newly listed properties went up by 1.6% month-over-month and remained at a 20-year low, which contributed to the month-over-month price increase of also 1.6%, which CREA states is a large increase for a single month. It says most major markets saw a price increase for the month.
The actual national average home price was down by 3.9% in April 2023 compared to the same period last year, hovering at $716,000. But this represents a recovery from the slump, up by $103,500 from January 2023 — driven by the major gains in Metro Vancouver and Greater Toronto. If both of these major regions were taken out of the calculation, the national average price would drop by more than $144,000.
In response to the statistics released, Bryan Yu, the chief economist of Central 1, suggests sellers’ markets are returning in many markets across the country.
“We are clearly seeing sellers’ markets re-emerge in many markets. Buyers meeting the income requirements are dipping into their amassed pandemic savings to fund down payments and running into the undersupplied market,” said Yu.
“Prospective sellers have held back over the past year given a strong labour market, and lack of incentive to move due to higher rates and the modest price correction.”